In a meeting that took place on Thursday, US Treasury Secretary Janet Yellen told various bank CEOs that more mergers may be necessary for the health of the industry. Moreover, CNN reported that Yellen’s statement was made regarding the health of the banking sector amid the ongoing crisis
The statements signify that both Yellen and the Biden administration have observed the merits of more potential mergers. Specifically, the industry is seeking to recover from the largest bank collapse since the financial crisis of 2008.
Yellen Prepares Banks for Possible Mergers
In a meeting that took place on Thursday, US Treasury Secretary Janet Yellen spoke to various bank CEOs about the potential need for more mergers. Specifically, the statement arrived in response to the banking crisis that has threatened the industry for much of the year.
Falling stock prices and weakened regional financial institutions have presented a concerning predicament for officials. Moreover, the failures of banks like First Republic, and Silicon Valley Bank, have led to the idea that takeovers could be in the best interest of the industry as a whole.
Yellen met with board members of the Bank Policy Institution in Washington on Thursday. Among those present were JP Morgan Chase CEO Jamie Dimon, and Citigroup CEO Jane Fraser, among others.
The Treasury Department provided a readout that articulated Yellen’s sentiments. Specifically, she affirmed “the strength and soundness of the US banking system,” to those in attendance. Additionally, she thanked those attendees for “their leadership and support.”
Conversely, the readout did not include the discussion of bank mergers reported by CNN, with information from two people close to the situation. Alternatively, earlier this month, US regulators allowed JP Morgan to acquire the falling First Republic Bank in a move that aimed to stabilize the threatened sector.
Additionally, in a conversation with Reuters, Yellen noted a necessary consolidation of mid-sized banks. “This might be an environment in which we’re going to see more mergers, and, you know, that’s something I think the regulators will be open to,” Yellen stated.